LOVELAND -- A bounty hunter with a private Michigan bail bonds firm is behind bars after he allegedly kidnapped a 29-year-old man and demanded money and drugs in exchange for his release.

Chad Russell Farquhar, 38, is being held at the Larimer County jail in lieu of a $175,000 bond. Loveland police arrested him Saturday night in the 900 block of East Eisenhower Boulevard on suspicion of first-degree kidnapping.

Farquhar is a bail enforcement agent with Quick Bail Bonds in Jackson, Mich. The firm's owner, Charles Davis, fervently denies the allegations and has an attorney working with Farquhar to navigate the judicial process.

Farquhar and another agent, Shannon Stabelton, were headed to Sheridan, Wyo., to apprehend a fugitive. On their way north, they opted to drive through Colorado into Loveland to pick up Jason Olson, 29, of Michigan on a misdemeanor traffic warrant, Davis said.

The two bounty hunters contacted Olson at a Loveland home, though Loveland Police Department spokesman Sgt. Jeff Fisher didn't know where. Olson's family later phoned police, alleging that the agents asked for an unspecified amount of money and drugs in exchange for Olson's release, Fisher said.

Family of Farquhar worked with Loveland police to set up a meeting that Farquhar voluntarily attended, Fisher said. Authorities arrested him there on the suspected charges.

When asked if Farquhar could do such a thing, Davis said, "No way in hell." Though Farquhar has a criminal record, Davis said, he's a "good, upstanding young man,"

Police released Stabelton without charges. Police didn't take Olson into custody because his warrant was not extraditable; the offense is minor enough that the original agency would not pay to bring the suspect to court.

Investigators plan to file with the Larimer County District Attorney's office other potential charges against Farquhar, Fisher said. He is scheduled to appear Friday morning in 8th Judicial District Court.